Populism in Latin America has reached a crisis point

LATIN AMERICA like North America, has moved to the left over the past few years. There victories in Argentina, Brazil, Bolivia, Venezuela, Chile and Uruguay were supposed to stand for prudent macroeconomic policies and the retention of the best of liberalising reforms of the 1990s, but combined with better social policies. Has yesterdays Populism in Latin America now reached a crisis point ?

In different ways and to different degrees, all correspond to the Latin American past tradition of populism.

“Populism” is a slippery, elusive concept but it is central to understanding what is happening in the region. One of its many difficulties is that it is often used as a term of abuse. In many parts of the world, “populist” is loosely used to describe a politician who seeks popularity through means disparaged as appealing to the baser instincts of voters.

But populism does have a more precise set of meanings—though these vary from place to place. In 19th-century Russia, populists were middle-class intellectuals who embraced peasant communalism as an antidote to Western liberalism..

But it is in Latin America where populism has had the greatest and most enduring influence. As in Russia and the United States, it began as an attempt to ameliorate the social dislocations caused by capitalism. In Latin America it became an urban movement. Its heyday was from the 1920s to the 1960s, as industrialisation and the growth of cities got under way in the region. It was the means by which the urban masses—the middle and working classes—were brought into the political system.

In Europe, that job was done by social-democratic parties. In Latin America, where trade unions were weaker, it was accomplished by the classic populist leaders. They included Getulio Vargas, who ruled Brazil in various guises in 1930-45 and 1950-54; Juan Perón in Argentina (pictured above) and his second wife, Eva Duarte; and Victor Paz Estenssoro, the leader of Bolivia’s national revolution of 1952. They differed from socialists or conservatives in forging multi-class alliances.

Give me a balcony

Typically, their leadership was charismatic. They were great orators or, if you prefer, demagogues (“Give me a balcony and I will become president,” said José Maria Velasco, Ecuador’s most prominent populist, who was five times elected president and four times overthrown by the army). Like the others Perón used the new instrument of radio to reach the masses. Mr Chávez’s “Bolivarian revolution” relied heavily on the skills of Chavez’s skills as a communicator which he exercised every Sunday in his four-hour television programme. Now we see more recently Argentina President Kirchner using TV time slots reserved for important state messages using the platform to appeal to the uneducated sounding like a televangelist.

Some of the populists, such as Victor Raúl Haya de la Torre, the founder of Peru’s ARRA party, and William Jennings Bryan, relied on religious imagery or techniques. (“You shall not crucify mankind on a cross of gold),” Bryan preached

The populist leaders sought a direct bond with their mass following. They led personal movements rather than well-organised parties. Argentina’s dominant political organisation bears Perón’s name. Take Mr Chávez out of the “Bolivarian revolution” and there would be nothing left.

The populists saw elections as the route to power, and pushed successfully to expand the franchise. But they also relied on mass mobilisation—on getting their followers out into the streets. They were often less than democratic in their exercise of power: they blurred the distinction between leader, party, government and state. Perón, for example, packed the judiciary, put his own people in charge of trade unions, and rigged his re-election in 1950. Mr Chávez used a constituent assembly to gain control of all the institutions of state

Not coincidentally, many of the populists have been military officers. That goes for Vargas, Perón and Lázaro Cardenas, Mexico’s president from 1934 to 1940, who nationalised foreign oil companies and handed land to peasants. Chávez and Humala are retired lieutenant-colonels. Part of their appeal is that of the military caudillo, or strongman, who promises to deliver justice for the “people” by firm measures against the “exploiters”. Some scholars distinguish between military populists and civilians such as Haya de la Torre and Paz Estenssoro, whom they see as “national revolutionaries” closer to social democracy.

But there are many common threads. One is nationalism. The populists championed national culture against foreign influences. They harked back to forgotten figures and events from their country’s past. For example in Argentina it is the disputed islands called Malvina’s or as the English call them the Falklands.

While their preaching was often anti-capitalist, they always made deals with capitalists. They rallied their followers against two rhetorical enemies: the “oligarchy” of rural landlords and foreign “imperialists”. They supported industry and a bigger role for the state in the economy, and they granted social benefits to workers. They often paid for this by printing money.

Though populists were not alone in favouring inflationary finance, they were particularly identified with it. Some commentary on populism has emphasised this aspect. In their book “The Macroeconomics of Populism”, Rudiger Dornbusch and Sebastian Edwards characterise “economic populism” as involving a dash for growth and income redistribution while ignoring inflation, deficit finance and other economic and social risks.

Such policies were pursued not just by populists of the past, but by are being followed by the the likes of the Kirchners, Argentina’s Peronist presidents. Populist economics was adopted, too, by Salvador Allende, Chile’s Socialist president of 1970-73, and Nicaragua’s Sandinistas. That has led many observers to use “populist” and “extreme leftist ” interchangeably—a mistake that led foreign investors to lose money when they panicked unduly when Lula won Brazil’s election in 2002.

More Mussolini than Marx

In fact, there is nothing inherently left-wing about populism. Some populist leaders were closer to fascism: Perón lived as an exile in Franco’s Spain for 18 years. Many favoured corporatism—the organisation of society by functional groups, rather than the individual rights and pluralism of liberal democracy.

Populism is more of a scheme of power than an ideology.

Populism is full of contradictions. It is above all anti-elitist, but then goes on to create new elites of their own. It claims to favour ordinary people against oligarchs. But at the end of every populist experiment results in real wages that are lower than they were at the beginning.”

Populism brought mass politics to Latin America, but its relationship to democracy is ambivalent. Populists crusade against corruption, but often engender more corruption than any other political movement. Argentina, Brazil, Venezuela and now Chile are all mired in corruption scandals.

In the 1960s, populism seemed to fade away in Latin America, squeezed by Marxism, Christian democracy and military dictatorship. Its current revival shows that it is deeply rooted in the region’s political culture. But it also involves some new elements. The new crop of populist leaders rely partly on the politics of ethnic identity: Chávez and Humala are both mestizos. Their coalitions are based on the poor, both urban and rural, and those labouring in the informal economy. They champion those discomfited by globalisation rather than industrialisation.

One big reason for populism’s persistence is the extreme inequality in the region. That reduces the appeal of incremental reform and increases the appeal of messianic leaders who promise a new world. Yet populism has done little to reduce income inequality and in fact in many cases has worsened it.

A second driver of populism has been Latin America’s wealth of natural resources. Many Latin Americans believe that their countries are rich, whereas in truth they are not. Populists blame poverty on corruption, on a grasping oligarchy or, nowadays, on multinational oil or mining companies.

That often plays well at the ballot box. But it is a misdiagnosis. Countries develop through a mixture of the right policies and the right institutions. Whatever their past achievements, the populists have led Latin America down a blind alley.

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